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Entering Form 1099-C on an Individual return in Lacerte

by Intuit Updated 1 year ago

For tax year 21 taxpayers through 2025 that received eligible Student Loan Forgiveness may not have to report this as income on their tax return. Per IRS Guidance the creditor should not issue a 1099-C to these individuals. See IRS and Treasury issue guidance for students with discharged student loans and their creditors for more information.

Follow these steps to report a 1099-C Cancelation of Debt for Form 1040:

  1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
  2. Scroll down to the Alimony and Other Income section
  3. Enter the Cancelation of debt (1099-C) code 6 under the Cancelation of Debt subsection (this amount is typically found on Form 1099-C, box 2. To verify, see the computation below.)

Figuring the amount to use for Cancelation of Debt when viewing the 1099-C:

The total amount of debt immediately prior to foreclosure minus the fair market value of the property from Form 1099-C, box 7.

If less than 0, enter 0.

The amount on line 3 (of the computation) will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions; See Home Foreclosures and Debt Cancelation and Individual 1099-A 1099-C Foreclosure Repossession Quitclaim Short Sale for more information.

Related topics

Lacerte Tax

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